Lugia Bank granted a P4,000,000 loan to Ho-oh Company on January 1, 2020. The annual interest of the loan is 12% payable semi-annually. The loan matures in two years. The effective interest rate on the loan is 16%. (Round off present value factors up to four decimal point; only round off up to two decimals the final value) Questions: 1. What is the initial carrying amount of the loan? 2. How much is the interest income for the year 2020? 3, What is the balance of the discount on the loan as of December 31, 2020?
Lugia Bank granted a P4,000,000 loan to Ho-oh Company on January 1, 2020. The annual interest of the loan is 12% payable semi-annually. The loan matures in two years. The effective interest rate on the loan is 16%. (Round off present value factors up to four decimal point; only round off up to two decimals the final value) Questions: 1. What is the initial carrying amount of the loan? 2. How much is the interest income for the year 2020? 3, What is the balance of the discount on the loan as of December 31, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
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